Over the last few years, the global crypto market has been on an upward track, with 2021 marking the industry’s pinnacle. Notably, the emerging market hit $3 trillion in market valuation to achieve a new all-time high, while signaling a major show of strength for an industry that had gone ignored for a very long time.
Thanks to the explosion of cryptocurrencies on the global financial landscape today, many people are now reevaluating their stance about investing in them. However, while the first cryptocurrency was born in 2009, this sensational adoption didn’t commence until 2017.
Interestingly, and contrary to the popular misconception, crypto startup venture capital firms have been in existence long before the digital asset class’s meteoric rise to prominence back in 2017. This is evidenced by the fact that certain crypto VCs were founded as early as 2011, as in the instance of Digital Currency Group, and in 2012 in the case of Winklevoss Capital and Boost VC.
The number of these VCs continued to rise with the boom in the crypto market, providing much-needed funding across various sectors at different funding stages. In today’s article, we’ll consider the top 10 crypto VCs we think you should keep an eye on in 2022. But first, let’s quickly take a look at how VC firms operate within the crypto niche.
How do VC firms work in the crypto industry?
It is no longer news that the cryptocurrency sector is still in its early stages, with plenty of possibilities and room for expansion. Many VC firms see that crypto is the wave of the future, and they would not want to lose out on what may be the most lucrative investment opportunity of our time, by simply watching from the sideline.
Despite the fact that the crypto market remains unpredictable, VC firms who believe in blockchain and cryptocurrency startups are willing to take the bull by its horn.
Aside from a few differences inherent in the underlying infrastructure of most projects, venture capital fundraising in the crypto realm is similar to traditional VC funding. Notably, the startups, the majority of which are based on blockchain, operate within the cryptocurrency market, as opposed to the traditional market.
Today, VC investors are increasingly flocking to crypto for various reasons including noteworthy moments such as Coinbase’s IPO, El Salvador’s acceptance of Bitcoin as a legal tender, and the incorporation of crypto tax regulations in nations like the US, the UK, Canada, and so on.
That said, below are the top 10 crypto venture capital firms (in descending order) to keep an eye on in 2022.
10. ConsenSys Ventures
Starting at number ten, we have ConsenSys Ventures based in San Francisco, California. Founded in 2016, ConsenSys Ventures is the investment arm of the blockchain software technology company, ConsenSys, the same company that developed the popular Ethereum-based MetaMask wallet.
ConsenSys’s investment arm funds a number of blockchain and cryptocurrency startups. Since its inception in 2016, the venture capital company has maintained a single investment fund, which it has utilized to make 32 investments in blockchain startups. The corporation has only exited one of these 32 investments so far.
9. 8 Decimal Capital
Established in 2017, 8 Decimal Capital is a venture capital firm situated in San Francisco, California. It is known for providing crypto startup funding across a range of investment stages and methods, including initial coin offerings (ICOs) and outright shareholdings (i.e. equity).
Also, because of the unpredictable nature of most crypto projects, 8 Decimal Capital leverages its skilled advisory network, which guarantees that the funded startups have the greatest possible chance of succeeding.
Since its inception five years ago, the firm has managed a single investment fund. The firm has made a total of 43 investments with the most recent among them being Parallel Finance back in June 2021. As of now, the corporation is yet to liquidate any of its holdings, making it a great deal for funded startups, especially those seeking long-term investment.
8. Fenbushi Capital
Fenbushi Capital is a Chinese venture capital firm headquartered in Shanghai, China. Launched in 2015, the firm claims to be Asia’s most active blockchain-focused venture capital firm. The corporation wants to leverage its financial strength and industrial knowledge to help the global blockchain ecosystem to thrive.
Since its inception seven years ago, the organization has overseen a total of 88 investments in blockchain-related technology startups, four of which the VC has exited from.
Notable startups in which Fenbushi Capital has invested include Fold, a gift card platform designed to help spend Bitcoin in the real world. Multiverse Labs, which leverages blockchain to improve resource-sharing, is another beneficiary of FC investment.
7. Winklevoss Capital
Perhaps one of the oldest in the game, Winklevoss Capital is an American VC firm birthed by the Winklevoss brothers in 2012. While the firm mainly operates from its New York office in the US, it provides seed funding and infrastructure to early-stage startups.
Although the team didn’t start originally as a crypto-focused VC, it has since made significant investments in the crypto space that qualifies them as a crypto start-up VC firm. Since its inception nine years ago, the organization has made a total of 123 investments in new enterprises. In the company’s trading history, it has withdrawn from 23 of these positions.
In its most recent endeavor, Winklevoss Capital joined Soros Fund Management and others to invest $359 million in the NFT-focused company, Animoca, whose valuation subsequently ballooned from $1 billion to $5 billion.
6. Coinbase Ventures
Coinbase Ventures is an American VC firm situated in San Francisco, California. It was incorporated in 2018 as the investing arm of the digital asset exchange, Coinbase. Knowing its involvement in the crypto space as far back as 2012, there is little or no wonder that the business chooses to actively invest in the crypto startup space.
Founded projects receive early-stage investment from the VC, allowing them to bring their ideas to reality. While it specializes in early-stage investment, Coinbase Ventures strictly focuses on blockchain and cryptocurrency-related projects.
Notable examples of projects that Coinbase Ventures has backed include crypto exchange platforms like CoinDCX and blockchain-based video distribution like Livepeer based on their activities within these sectors.
Since inception in 2018, Coinbase Ventures has made 130 investments in emerging blockchain and cryptocurrency firms. More so, despite its large number of investment portfolios, the corporation has only exited from four projects to date.
5. Pantera Capital
Pantera Capital was originally founded in 2003 as an asset management company based in Menlo Park, California. However, it subsequently launched what it claimed to be the first investment fund focused on Bitcoin in 2013.
Ever since, Pantera has been known for specializing in digital currency and blockchain technology investments. As such, its investment is primarily targeted at early-stage VC and seed-stage rounds with a median round amount of $9.8 million.
Notable beneficiaries of Pantera Capital include Pintu and Vauld, two of the firm’s most recent additions, both of which strive to make trading digital assets easier.
Since its founding by Dan Morehead, Pantera Capital has managed at least five investment funds. In total, the VC has been able to build an investment portfolio of no fewer than145 startups, 15 of which it has pulled out from.
4. Craft Ventures
Craft Ventures is an American venture capital firm situated in San Francisco, California. It was created five years ago by Bill Lee, David Sacks, and Jeff Fluhr. The organization provides early-stage venture capital investment to a range of technological startups, including crypto venture capital.
Since its inception in 2017, the VC company has overseen the management of five investment funds. With this money, the organization has been able to make 158 investments in rising businesses. The company has successfully exited 15 of these investments as of now.
3. Digital Currency Group
Founded in 2011 by Barry Silbert, Digital Currency Group is an American venture capital firm based in New York. Although it invests in fintech projects that are not based on blockchain, the company’s status as a crypto startup VC is undeniable, as it contributes significantly as much as support companies in the cryptocurrency and blockchain space.
DCG’s vast network and access to wealth makes it highly sought-after, and as such, many startups have turned to them for funding and with proper presentation, have received it in good measure.
Since its inception a decade ago, the firm has made a total of 235 investments and purchased two more enterprises along the way. Likewise, the Group has pulled out of 28 of its investments thus far.
2. Boost VC
Proclaimed to be the “pre-seed fund making Sci-Fi a reality,” Boost VC is an American venture capital firm that specializes in crypto startup VC, virtual reality, augmented reality, AI, open tech, space tech, and human augmentation, which appears to be a new love.
The 2012-founded American VC firm is based in San Mateo, and is led by Adam Draper and Brayton Williams, both of whom serve as founders and managing directors. Unlike the majority of their peers, Boost VC only invests in new projects twice a year and offers extended services such as coaching and office space to help them expand.
Since its inception a decade ago, the crypto VC firm has managed a variety of investment funds totaling $2 billion according to its official website. Furthermore, it has been able to develop an investment portfolio that includes at least 253 startups, 25 of which it has exited from.
1. RRE Ventures
RRE Ventures takes the position of number one on this list for many reasons, one of which includes having the most projects in its portfolio.
Founded by Jim Robinson and Stuart Ellman in 1994, long before the launch of Bitcoin (the first mainstream cryptocurrency), RRE Ventures is an American VC firm headquartered in New York.
Prior to its foray into crypto asset classes and startup funding, the American VC firm was known for investing in a wide array of companies operating across various emerging sectors including software, internet, communications, aerospace, robotics, 3D printing, and financial services among others.
Also, being a top dog in the VC business, RRE invests at the early seed stage, Series A, and Series B rounds. More recently, the firm has made a significant investment in the crypto space that classifies it as a crypto startup venture capital.
Since inception, RRE Ventures has managed a total of nine investment funds and has backed a total of 567 projects across different phases. Currently, the almost three-decades old VC firm has successfully exited a total of 111 projects.
Special Mention: Haun Ventures
Haun Ventures, the newest member to the list, recently made headlines after obtaining its first and largest round of funding. Following her departure from Andreessen Horowitz, where she previously worked, the new VC founder and investor, Katie Haun, reportedly raised $1.5 billion.
According to Haun, the newly established venture capital firm will initially function as two funds: a $500 million early-stage fund and a $1 billion acceleration fund. And by running a pair of venture capital funds, Haun Ventures would become the first of its kind, and as it is, the most well endowed startup VC firm of all time.